Tata Steel is getting ready to commence "integrated, commercial production" of the first phase of the 3-million ton steel plant in Odisha by September and is keen to keep the project cost below the projected Rs 25,000 crore.
"Integrated commissioning of all units for the first phase will take another six months. Project cost remains within the revised budget and even it could (be) lower," Tata Steel V-P Operations (Odisha) Rajiv Kumar said.
The company is gradually synchronising integrated steel plant components like blast furnace, coke oven, sinter plant, captive power units and hot rolling, among others in stages, he said.
The timeline and cost was revised in 2011 in the wake of delay in land acquisition, which pushed back the project by four years.
Kumar did not share the cost of the original project, the MoU of which was signed with the Odisha government a decade ago.
With the Kalinganagar first phase, capacity of the steel major is expected to go up to 13 mt in India.
Kumar indicated that demand and market scenario could play a big role in construction of the second phase.
He said that the greenfield plant would produce 3 mtpa of steel in the first phase and later the capacity would be ramped up to 6 mtpa. No time frame for scaling up the capacity was announced.
"We need to have the market share intact as the Indian steel market grows. Accordingly, we will plan that,” he said when asked about the time period for ramping up production to 6 mtpa.
The Kalinganagar plant will be spread over 3,470 acres, of which, about 900 acres are not under the company's possession at present. "Out of the total land required, we are in the process of getting 900 acres," Kumar said.
The company will eventually source iron ore from Khondbond mine located in the Keonjhar district of Odisha.
"We have a dedicated iron ore mine at Khonbond around 200 km away from the plant. The mine is being developed. Right now, we are getting iron ore from Joda (Joda East Iron Mine)," he said.
"Close to Rs 2,000 crore is being invested to develop the mine and investment for mining development is separate from the Rs 25,000 crore investment in the Kalinganagar plant," he said.
Hundred percent flat, lighter and higher tensile strength steel will be produced at the plant. The product portfolio will be expanded to high-grade flat products for application in ship-building, Defence equipment, energy and power, infrastructure, aviation and lifting and excavation, Kumar said.
A 202-MW gas-based captive power plant, using gases discharged by coke oven and blast furnace, will also be commissioned at the plant.
The company had signed an MoU with the Odisha government way back in 2004 for setting up the plant. Subsequently, some events in 2006 over land acquisition and police firing pushed the project back by about four years, he said.
Kumar said: "Resettlement and Rehabilitation (R&R) initiatives taken by the company helped to gain the confidence of the people."
Later in 2011, the company sought its board's approval for the revised scheme.
"We took a major drive in R&R initiatives. So far, 1,084 families have been rehabilitated out of the total 1,234 displaced families. Around 150 families are yet to be rehabilitated," said Parthasarathi Mishra, Chief of Human Resource Management at the Kalinganagar and Gopalpur projects of the company.